BiggerPockets Real Estate Podcast
Feb 2025 Housing Market Update: Are Our Predictions Already Wrong?
Feb 14, 2025
The housing market in 2025 is showing surprising resilience, with home prices continuously rising despite interest rates in the sevens. A Q1 update reveals shifting trends in mortgage delinquencies and inventory levels, prompting questions about potential price drops. One troubling metric could foreshadow market distress, while discussions about the stability of buyer demand add to the complexity. Experts also explore alternative investment strategies, emphasizing the adaptation needed to navigate this evolving landscape.
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Quick takeaways
- Despite rising home prices and demand, inflation-adjusted figures reveal a stable market, emphasizing the importance of distinguishing nominal from real price movements.
- An increase in housing inventory indicates a shift towards a more balanced market, potentially benefiting buyers with greater negotiation power despite ongoing high mortgage rates.
Deep dives
Current Housing Prices and Inflation Adjustment
Housing prices have increased significantly, showing a 4.8% rise year over year, which surpasses the long-term average appreciation rate of 3.4%. However, when adjusting for inflation, the real price changes indicate that prices are nearly flat, suggesting a closer alignment with inflation rates. This trend highlights the importance of understanding nominal versus real price movements in the housing market. Although many markets are showing price growth, the inflation-adjusted figures illustrate a nuanced picture of the market's health.
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